| Recently, a number of the world's leading project | | | | down, decomposed into a series of projects. |
| management organisations have taken major | | | | Therefore, you need to be good at doing project |
| initiatives to enlighten executive management | | | | management to deliver the strategy. Now, the |
| about the strategic importance and benefits of | | | | literature says that for an organisation to be good |
| project management. The focus is to move from | | | | at doing projects it has to: put in project |
| individual project management to organisational | | | | management procedures, train people on how to |
| project management, which these organisations | | | | apply/do project management and co-ordinate |
| maintain is a strategic advantage in a competitive | | | | the efforts of the people trained to work to |
| economy. | | | | procedures in and integrated way using the |
| In this article, Ed Naughton, Director General of | | | | concept of a project office. Does taking those |
| the Institute of Project Management and current | | | | three steps deliver a competitive advantage for |
| IPMA Vice President, asks Professor Sebastian | | | | this organisation? |
| Green, Dean of the Faculty of Commerce and | | | | Prof. Green: Where project management, or how |
| Professor of Management and Marketing at | | | | you manage projects, becomes a source of |
| University College Cork (formerly of the London | | | | competitive advantage is when you can do things |
| Business School), about his views of strategic | | | | better than others. The 'better than' is through |
| project management as a vehicle for competitive | | | | the experience and judgement and the knowledge |
| advantage. | | | | which is built up over time of managing projects. |
| Ed: What do you thing strategic Project | | | | There is an experience curve effect here. Two |
| Management is? | | | | organisations will be at different points in the |
| Prof. Green: Strategic project management is the | | | | experience curve as to the knowledge they have |
| management of those projects which are of | | | | built up to manage those bits of projects where |
| critical importance to enable the organisation as a | | | | the rule book is inadequate. You need |
| whole to have competitive advantage. | | | | management judgement and experience because |
| Ed: And what defines a competitive advantage, | | | | however good the rule book is, it will never deal |
| then? | | | | completely with the complexity of life. You have |
| Prof. Green: There are three attributes of having | | | | to manage down the experience curve, you have |
| a core competence. The three attributes are: it | | | | to manage the learning and knowledge that you |
| adds value to customers; it's not easily imitated; it | | | | have of those three aspects of project |
| opens up new possibilities in the future. | | | | management for it to become strategic. |
| Ed: But how can project management yield a | | | | Ed: Well, then, I think there is a gap there that |
| competitive advantage? | | | | has to be addressed as well, in that we have now |
| Prof. Green: There are two aspects to project | | | | developed a competency at doing project |
| management. One aspect is the actual selection of | | | | management to do projects, but we haven't |
| the type of projects that the organisation | | | | aligned that competency to the selection of |
| engages in, and secondly there is implementation, | | | | projects which will help us to give this competitive |
| how the projects themselves are managed. | | | | advantage. Is project management capable of |
| Ed: Competitive advantage - the importance of | | | | being imitated? |
| choosing the correct projects - it isn't easy to | | | | Prof. Green: Not the softer aspects and not the |
| define which projects should be chosen! | | | | development of tacit knowledge of having run |
| Prof. Green: I think that the selection and | | | | many, many projects over time. So, for example, |
| prioritisation of projects is something that hasn't | | | | you, Ed, have more knowledge of how to run |
| been done well within the project management | | | | projects than other people. That's why people |
| literature because it's basically been assumed | | | | came to you, because while you both may have |
| away through reducing it to financial analysis. The | | | | a standard book such as the PMBoK or the ICB, |
| strategic imperative gives you a different way of | | | | you have developed more experiential knowledge |
| prioritising projects because it's saying that some | | | | around it. |
| projects may not be as profitable as others, but | | | | In essence, it can be imitated a certain amount of |
| if they add to our competency relative to others, | | | | the way, but not when you align the softer tacit |
| then that's going to be important. | | | | knowledge of experience into it. |
| So, to take an example, if a company's | | | | Ed: Organisational project management maturity |
| competitive advantage is introducing new | | | | models are a hot topic at the moment and are |
| products more quickly than others, | | | | closely linked to the 'experience curve' effect you |
| pharmaceuticals, let's say, getting product to | | | | mentioned earlier - how should we view them? |
| market more quickly, then the projects that | | | | Prof. Green: I believe in moving beyond painting by |
| enable it to get the product more quickly to | | | | numbers, moving beyond the simplistic idea that |
| market are going to be the most critical ones, | | | | an organisation is completely plastic and you can |
| even if in their own terms, they do not have | | | | impose this set of procedures and skills and text |
| higher profitability than other sorts of projects. | | | | book protocols and that's all you need to do. In a |
| Ed: But if we're going to select our projects, we | | | | way, exactly the same problem was experienced |
| have to define what are the parameters or | | | | by the developers of the experience curve. If |
| metrics we're going to select them against that | | | | you show companies the experience curve on |
| give us the competitive advantage. | | | | cost, it's almost as though, for every doubling of |
| Prof. Green: Absolutely. The organisation needs to | | | | volume, cost reductions occur without you having |
| know which activities it is engaged in, which are | | | | to do anything. What we know is though, that the |
| the important ones for it competitive advantage | | | | experience curve is a potential of a possibility. Its' |
| and then, that drives the selection of projects. | | | | realisation depends on the skill of managers. |
| Organisations aren't very good at doing that and | | | | Ed: Are senior executives/chief executives in the |
| they may not even know what those activities | | | | mindset to appreciate the potential benefits of |
| are. They'll think it's everything they do because | | | | project management? |
| of the power system. | | | | Prof. Green: Until recently, project management |
| Ed: If a company formulates its strategy, then | | | | has promoted itself in technical terms. If it was |
| what the project management community says is | | | | promoted in terms of the integration at general |
| that project management is the medium for | | | | management, at the ability to manage across the |
| delivering that strategy. So therefore, if the | | | | functions lending technique procedures with |
| organisation is good at doing project management, | | | | judgement, then it would be much more |
| does it have any strategic advantage? | | | | attractive to senior managers. So, it's about the |
| Prof. Green: Well, I suppose that comes back to | | | | blending of the hard and the soft, the techniques |
| this issue of the difference between the type of | | | | with the judgement and the experience that |
| projects that are chosen and the way you | | | | makes project management so powerful. If senior |
| manage the projects. Obviously choosing the type | | | | managers don't embrace it at the moment, it's |
| of projects depends on being able to link and | | | | not because they are wrong. It's because project |
| prioritise projects according to an understanding | | | | management hasn't marketed itself as effectively |
| of what the capability of an organisation is relative | | | | as it should've done. |
| to others. | | | | Ed: Do we need to sell to senior executives and |
| Ed: Let us assume that the strategy is set. In | | | | chief executives that it will deliver competitive |
| order to deliver the strategy, it has to be broken | | | | advantage to them? |